Texas 2017 - 85th Regular

Texas House Bill HB3920 Compare Versions

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1	1	85R12978 TJB-F
2	2	By: Thierry H.B. No. 3920
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a limitation on the total amount of ad valorem taxes
8	8	that may be imposed by a taxing unit on the residence homestead of a
9	9	lower-income individual that is located in a homestead preservation
10	10	district.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
13	13	adding Section 11.263 to read as follows:
14	14	Sec. 11.263. LIMITATION OF TAX ON CERTAIN HOMESTEADS IN
15	15	HOMESTEAD PRESERVATION DISTRICT. (a) In this section:
16	16	(1) "Homestead preservation district" means a
17	17	district as that term is defined by Section 373A.002, Local
18	18	Government Code.
19	19	(2) "Lower-income individual" means an individual
20	20	whose household income, for the household located at the
21	21	individual's residence homestead, is not greater than 60 percent of
22	22	the area median family income, adjusted for household size, for the
23	23	metropolitan statistical area in which the residence homestead is
24	24	located, as determined annually by the United States Department of
25	25	Housing and Urban Development.
26	26	(3) "Residence homestead" has the meaning assigned by
27	27	Section 11.13.
28	28	(b) The governing body of a taxing unit may by official
29	29	action adopt a limitation on the total annual amount of ad valorem
30	30	taxes that may be imposed by the taxing unit on the residence
31	31	homestead of a lower-income individual that is located in a
32	32	homestead preservation district.
33	33	(c) If a taxing unit adopts the limitation under this
34	34	section, the taxing unit may not increase the total annual amount of
35	35	ad valorem taxes imposed by the taxing unit on a residence homestead
36	36	described by Subsection (b) to an amount that exceeds the greater
37	37	of:
38	38	(1) the amount of ad valorem taxes the taxing unit
39	39	imposed on the residence homestead in the first tax year in which:
40	40	(A) the limitation under this section was in
41	41	effect; and
42	42	(B) the lower-income individual received a
43	43	residence homestead exemption for the property; or
44	44	(2) the amount determined under Subsection (d).
45	45	(d) If an individual makes an improvement to a residence
46	46	homestead to which the limitation under this section applies, other
47	47	than a repair and other than an improvement required to comply with
48	48	governmental requirements, a taxing unit that has adopted the
49	49	limitation may increase the amount of taxes on the homestead for the
50	50	first tax year the value of the homestead is increased on the
51	51	appraisal roll as a result of the improvement. The amount of the tax
52	52	increase is determined by applying the current tax rate of the
53	53	taxing unit to the difference between the appraised value of the
54	54	homestead with the improvement and the appraised value the
55	55	homestead would have had without the improvement. A limitation
56	56	under this section then applies to the increased amount of taxes
57	57	imposed by the taxing unit on the residence homestead until another
58	58	improvement is made.
59	59	(e) An improvement to property that would otherwise
60	60	constitute an improvement under Subsection (d) is not treated as an
61	61	improvement under that subsection if the improvement is a
62	62	replacement structure for a structure that was rendered
63	63	uninhabitable or unusable by a casualty or by wind or water damage.
64	64	For purposes of appraising the property in the tax year in which the
65	65	structure would have constituted an improvement under Subsection
66	66	(d), the replacement structure is considered to be an improvement
67	67	under that subsection only if:
68	68	(1) the square footage of the replacement structure
69	69	exceeds that of the replaced structure as that structure existed
70	70	before the casualty or damage occurred; or
71	71	(2) the exterior of the replacement structure is of
72	72	higher quality construction and composition than that of the
73	73	replaced structure.
74	74	(f) Except as provided by Subsection (h) or (j), a
75	75	limitation under this section expires on January 1 if:
76	76	(1) the property is not the residence homestead of the
77	77	individual entitled to the limitation for the preceding tax year;
78	78	or
79	79	(2) none of the owners of the property qualify as a
80	80	lower-income individual.
81	81	(g) If the appraisal roll provides for taxation of appraised
82	82	value for a prior year because a limitation under this section was
83	83	erroneously allowed, the tax assessor for the taxing unit shall add
84	84	as back taxes due, as provided by Section 26.09(d), the positive
85	85	difference if any between the tax that should have been imposed for
86	86	that tax year and the tax that was imposed because of the provisions
87	87	of this section.
88	88	(h) If an individual who qualifies for a limitation under
89	89	this section dies, the surviving spouse of the individual is
90	90	entitled to the limitation on taxes imposed by the taxing unit on
91	91	the residence homestead of the individual if the homestead of the
92	92	individual:
93	93	(1) is the residence homestead of the surviving spouse
94	94	on the date that the individual dies; and
95	95	(2) remains the residence homestead of the surviving
96	96	spouse.
97	97	(i) The limitation under this section does not expire
98	98	because the owner of an interest in the property conveys the
99	99	interest to a qualifying trust as defined in Section 11.13(j) if the
100	100	owner or the owner's spouse is a trustor of the trust and is
101	101	entitled to occupy the property.
102	102	(j) A limitation under this section does not expire if the
103	103	owner of the structure qualifies for an exemption under Section
104	104	11.13 under the circumstances described in Section 11.135(a).
105	105	(k) For each school district in an appraisal district that
106	106	adopts the limitation under this section, the chief appraiser shall
107	107	determine the portion of the appraised value of residence
108	108	homesteads of individuals on which school district taxes are not
109	109	imposed in a tax year because of the limitation under this section.
110	110	That portion is calculated by determining the taxable value that,
111	111	if multiplied by the tax rate adopted by the school district for the
112	112	tax year, would produce an amount equal to the amount of tax that
113	113	would have been imposed by the school district on those homesteads
114	114	if the limitation under this section was not in effect, but that was
115	115	not imposed because of that limitation. The chief appraiser shall
116	116	determine that taxable value and certify it to the comptroller as
117	117	soon as practicable for each tax year.
118	118	SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended
119	119	to read as follows:
120	120	(b) If an appraisal district receives a written request for
121	121	the appraisal of real property and improvements of a cooperative
122	122	housing corporation according to the separate interests of the
123	123	corporation's stockholders, the chief appraiser shall separately
124	124	appraise the interests described by Subsection (d) if the
125	125	conditions required by Subsections (e) and (f) have been met.
126	126	Separate appraisal under this section is for the purposes of
127	127	administration of tax exemptions, determination of applicable
128	128	limitations of taxes under Section 11.26, [or] 11.261, or 11.263,
129	129	and apportionment by a cooperative housing corporation of property
130	130	taxes among its stockholders but is not the basis for determining
131	131	value on which a tax is imposed under this title. A stockholder
132	132	whose interest is separately appraised under this section may
133	133	protest and appeal the appraised value in the manner provided by
134	134	this title for protest and appeal of the appraised value of other
135	135	property.
136	136	(g) A tax bill or a separate statement accompanying the tax
137	137	bill to a cooperative housing corporation for which interests of
138	138	stockholders are separately appraised under this section must
139	139	state, in addition to the information required by Section 31.01,
140	140	the appraised value and taxable value of each interest separately
141	141	appraised. Each exemption claimed as provided by this title by a
142	142	person entitled to the exemption shall also be deducted from the
143	143	total appraised value of the property of the corporation. The total
144	144	tax imposed by a taxing unit [school district, county,
145	145	municipality, or junior college district] shall be reduced by any
146	146	amount that represents an increase in taxes attributable to
147	147	separately appraised interests of the real property and
148	148	improvements that are subject to the limitation of taxes prescribed
149	149	by Section 11.26, [or] 11.261, or 11.263. The corporation shall
150	150	apportion among its stockholders liability for reimbursing the
151	151	corporation for property taxes according to the relative taxable
152	152	values of their interests.
153	153	SECTION 3. Sections 26.012(6), (13), and (14), Tax Code,
154	154	are amended to read as follows:
155	155	(6) "Current total value" means the total taxable
156	156	value of property listed on the appraisal roll for the current year,
157	157	including all appraisal roll supplements and corrections as of the
158	158	date of the calculation, less the taxable value of property
159	159	exempted for the current tax year for the first time under Section
160	160	11.31 or 11.315, except that:
161	161	(A) the current total value for a school district
162	162	excludes:
163	163	(i) the total value of homesteads that
164	164	qualify for a tax limitation as provided by Section 11.26; and
165	165	(ii) new property value of property that is
166	166	subject to an agreement entered into under Chapter 313; [and]
167	167	(B) the current total value for a county,
168	168	municipality, or junior college district excludes the total value
169	169	of homesteads that qualify for a tax limitation provided by Section
170	170	11.261 applicable to the taxing unit; and
171	171	(C) the current total value for a taxing unit
172	172	excludes the total value of homesteads that qualify for a tax
173	173	limitation provided by Section 11.263 applicable to the taxing
174	174	unit.
175	175	(13) "Last year's levy" means the total of:
176	176	(A) the amount of taxes that would be generated
177	177	by multiplying the total tax rate adopted by the governing body in
178	178	the preceding year by the total taxable value of property on the
179	179	appraisal roll for the preceding year, including:
180	180	(i) taxable value that was reduced in an
181	181	appeal under Chapter 42; and
182	182	(ii) all appraisal roll supplements and
183	183	corrections other than corrections made pursuant to Section
184	184	25.25(d), as of the date of the calculation, except that last year's
185	185	taxable value for a school district excludes the total value of
186	186	homesteads that qualified for a tax limitation as provided by
187	187	Section 11.26, [and] last year's taxable value for a county,
188	188	municipality, or junior college district excludes the total value
189	189	of homesteads that qualified for a tax limitation as provided by
190	190	Section 11.261 applicable to the taxing unit, and last year's
191	191	taxable value for a taxing unit excludes the total value of
192	192	homesteads that qualified for a tax limitation as provided by
193	193	Section 11.263 applicable to the taxing unit; and
194	194	(B) the amount of taxes refunded by the taxing
195	195	unit in the preceding year for tax years before that year.
196	196	(14) "Last year's total value" means the total taxable
197	197	value of property listed on the appraisal roll for the preceding
198	198	year, including all appraisal roll supplements and corrections,
199	199	other than corrections made pursuant to Section 25.25(d), as of the
200	200	date of the calculation, except that:
201	201	(A) last year's taxable value for a school
202	202	district excludes the total value of homesteads that qualified for
203	203	a tax limitation as provided by Section 11.26; [and]
204	204	(B) last year's taxable value for a county,
205	205	municipality, or junior college district excludes the total value
206	206	of homesteads that qualified for a tax limitation as provided by
207	207	Section 11.261 applicable to the taxing unit; and
208	208	(C) last year's taxable value for a taxing unit
209	209	excludes the total value of homesteads that qualified for a tax
210	210	limitation as provided by Section 11.263 applicable to the taxing
211	211	unit.
212	212	SECTION 4. Section 44.004(c), Education Code, is amended to
213	213	read as follows:
214	214	(c) The notice of public meeting to discuss and adopt the
215	215	budget and the proposed tax rate may not be smaller than one-quarter
216	216	page of a standard-size or a tabloid-size newspaper, and the
217	217	headline on the notice must be in 18-point or larger type. Subject
218	218	to Subsection (d), the notice must:
219	219	(1) contain a statement in the following form:
220	220	"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
221	221	"The (name of school district) will hold a public meeting at
222	222	(time, date, year) in (name of room, building, physical location,
223	223	city, state). The purpose of this meeting is to discuss the school
224	224	district's budget that will determine the tax rate that will be
225	225	adopted. Public participation in the discussion is invited." The
226	226	statement of the purpose of the meeting must be in bold type. In
227	227	reduced type, the notice must state: "The tax rate that is
228	228	ultimately adopted at this meeting or at a separate meeting at a
229	229	later date may not exceed the proposed rate shown below unless the
230	230	district publishes a revised notice containing the same information
231	231	and comparisons set out below and holds another public meeting to
232	232	discuss the revised notice.";
233	233	(2) contain a section entitled "Comparison of Proposed
234	234	Budget with Last Year's Budget," which must show the difference,
235	235	expressed as a percent increase or decrease, as applicable, in the
236	236	amounts budgeted for the preceding fiscal year and the amount
237	237	budgeted for the fiscal year that begins in the current tax year for
238	238	each of the following:
239	239	(A) maintenance and operations;
240	240	(B) debt service; and
241	241	(C) total expenditures;
242	242	(3) contain a section entitled "Total Appraised Value
243	243	and Total Taxable Value," which must show the total appraised value
244	244	and the total taxable value of all property and the total appraised
245	245	value and the total taxable value of new property taxable by the
246	246	district in the preceding tax year and the current tax year as
247	247	calculated under Section 26.04, Tax Code;
248	248	(4) contain a statement of the total amount of the
249	249	outstanding and unpaid bonded indebtedness of the school district;
250	250	(5) contain a section entitled "Comparison of Proposed
251	251	Rates with Last Year's Rates," which must:
252	252	(A) show in rows the tax rates described by
253	253	Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
254	254	property, for columns entitled "Maintenance & Operations,"
255	255	"Interest & Sinking Fund," and "Total," which is the sum of
256	256	"Maintenance & Operations" and "Interest & Sinking Fund":
257	257	(i) the school district's "Last Year's
258	258	Rate";
259	259	(ii) the "Rate to Maintain Same Level of
260	260	Maintenance & Operations Revenue & Pay Debt Service," which:
261	261	(a) in the case of "Maintenance &
262	262	Operations," is the tax rate that, when applied to the current
263	263	taxable value for the district, as certified by the chief appraiser
264	264	under Section 26.01, Tax Code, and as adjusted to reflect changes
265	265	made by the chief appraiser as of the time the notice is prepared,
266	266	would impose taxes in an amount that, when added to state funds to
267	267	be distributed to the district under Chapter 42, would provide the
268	268	same amount of maintenance and operations taxes and state funds
269	269	distributed under Chapter 42 per student in average daily
270	270	attendance for the applicable school year that was available to the
271	271	district in the preceding school year; and
272	272	(b) in the case of "Interest & Sinking
273	273	Fund," is the tax rate that, when applied to the current taxable
274	274	value for the district, as certified by the chief appraiser under
275	275	Section 26.01, Tax Code, and as adjusted to reflect changes made by
276	276	the chief appraiser as of the time the notice is prepared, and when
277	277	multiplied by the district's anticipated collection rate, would
278	278	impose taxes in an amount that, when added to state funds to be
279	279	distributed to the district under Chapter 46 and any excess taxes
280	280	collected to service the district's debt during the preceding tax
281	281	year but not used for that purpose during that year, would provide
282	282	the amount required to service the district's debt; and
283	283	(iii) the "Proposed Rate";
284	284	(B) contain fourth and fifth columns aligned with
285	285	the columns required by Paragraph (A) that show, for each row
286	286	required by Paragraph (A):
287	287	(i) the "Local Revenue per Student," which
288	288	is computed by multiplying the district's total taxable value of
289	289	property, as certified by the chief appraiser for the applicable
290	290	school year under Section 26.01, Tax Code, and as adjusted to
291	291	reflect changes made by the chief appraiser as of the time the
292	292	notice is prepared, by the total tax rate, and dividing the product
293	293	by the number of students in average daily attendance in the
294	294	district for the applicable school year; and
295	295	(ii) the "State Revenue per Student," which
296	296	is computed by determining the amount of state aid received or to be
297	297	received by the district under Chapters 42, 43, and 46 and dividing
298	298	that amount by the number of students in average daily attendance in
299	299	the district for the applicable school year; and
300	300	(C) contain an asterisk after each calculation
301	301	for "Interest & Sinking Fund" and a footnote to the section that, in
302	302	reduced type, states "The Interest & Sinking Fund tax revenue is
303	303	used to pay for bonded indebtedness on construction, equipment, or
304	304	both. The bonds, and the tax rate necessary to pay those bonds,
305	305	were approved by the voters of this district.";
306	306	(6) contain a section entitled "Comparison of Proposed
307	307	Levy with Last Year's Levy on Average Residence," which must:
308	308	(A) show in rows the information described by
309	309	Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
310	310	entitled "Last Year" and "This Year":
311	311	(i) "Average Market Value of Residences,"
312	312	determined using the same group of residences for each year;
313	313	(ii) "Average Taxable Value of Residences,"
314	314	determined after taking into account the limitation on the
315	315	appraised value of residences under Section 23.23, Tax Code, and
316	316	after subtracting all homestead exemptions applicable in each year,
317	317	other than exemptions available only to disabled persons or persons
318	318	65 years of age or older or their surviving spouses, and using the
319	319	same group of residences for each year;
320	320	(iii) "Last Year's Rate Versus Proposed
321	321	Rate per $100 Value"; and
322	322	(iv) "Taxes Due on Average Residence,"
323	323	determined using the same group of residences for each year; and
324	324	(B) contain the following information:
325	325	"Increase (Decrease) in Taxes" expressed in dollars and cents,
326	326	which is computed by subtracting the "Taxes Due on Average
327	327	Residence" for the preceding tax year from the "Taxes Due on Average
328	328	Residence" for the current tax year;
329	329	(7) contain the following statement in bold print:
330	330	"Under state law, the dollar amount of school taxes imposed on the
331	331	residence of a person 65 years of age or older or of the surviving
332	332	spouse of such a person, if the surviving spouse was 55 years of age
333	333	or older when the person died, may not be increased above the amount
334	334	paid in the first year after the person turned 65, regardless of
335	335	changes in tax rate or property value.";
336	336	(8) contain the following statement in bold print:
337	337	"Notice of Rollback Rate: The highest tax rate the district can
338	338	adopt before requiring voter approval at an election is (the school
339	339	district rollback rate determined under Section 26.08, Tax Code).
340	340	This election will be automatically held if the district adopts a
341	341	rate in excess of the rollback rate of (the school district rollback
342	342	rate)."; [and]
343	343	(9) contain a section entitled "Fund Balances," which
344	344	must include the estimated amount of interest and sinking fund
345	345	balances and the estimated amount of maintenance and operation or
346	346	general fund balances remaining at the end of the current fiscal
347	347	year that are not encumbered with or by corresponding debt
348	348	obligation, less estimated funds necessary for the operation of the
349	349	district before the receipt of the first payment under Chapter 42 in
350	350	the succeeding school year; and
351	351	(10) contain, if the school district has adopted the
352	352	limitation under Section 11.263, Tax Code, the following statement
353	353	in bold print: "Under state law, the dollar amount of school taxes
354	354	imposed on a residence homestead of a lower-income individual in a
355	355	homestead preservation district may not be increased above the
356	356	amount of school taxes imposed on the property in the year in which
357	357	the individual first qualified for the limitation, regardless of
358	358	changes in tax rate or property value.".
359	359	SECTION 5. Section 403.302(d), Government Code, is amended
360	360	to read as follows:
361	361	(d) For the purposes of this section, "taxable value" means
362	362	the market value of all taxable property less:
363	363	(1) the total dollar amount of any residence homestead
364	364	exemptions lawfully granted under Section 11.13(b) or (c), Tax
365	365	Code, in the year that is the subject of the study for each school
366	366	district;
367	367	(2) one-half of the total dollar amount of any
368	368	residence homestead exemptions granted under Section 11.13(n), Tax
369	369	Code, in the year that is the subject of the study for each school
370	370	district;
371	371	(3) the total dollar amount of any exemptions granted
372	372	before May 31, 1993, within a reinvestment zone under agreements
373	373	authorized by Chapter 312, Tax Code;
374	374	(4) subject to Subsection (e), the total dollar amount
375	375	of any captured appraised value of property that:
376	376	(A) is within a reinvestment zone created on or
377	377	before May 31, 1999, or is proposed to be included within the
378	378	boundaries of a reinvestment zone as the boundaries of the zone and
379	379	the proposed portion of tax increment paid into the tax increment
380	380	fund by a school district are described in a written notification
381	381	provided by the municipality or the board of directors of the zone
382	382	to the governing bodies of the other taxing units in the manner
383	383	provided by former Section 311.003(e), Tax Code, before May 31,
384	384	1999, and within the boundaries of the zone as those boundaries
385	385	existed on September 1, 1999, including subsequent improvements to
386	386	the property regardless of when made;
387	387	(B) generates taxes paid into a tax increment
388	388	fund created under Chapter 311, Tax Code, under a reinvestment zone
389	389	financing plan approved under Section 311.011(d), Tax Code, on or
390	390	before September 1, 1999; and
391	391	(C) is eligible for tax increment financing under
392	392	Chapter 311, Tax Code;
393	393	(5) the total dollar amount of any captured appraised
394	394	value of property that:
395	395	(A) is within a reinvestment zone:
396	396	(i) created on or before December 31, 2008,
397	397	by a municipality with a population of less than 18,000; and
398	398	(ii) the project plan for which includes
399	399	the alteration, remodeling, repair, or reconstruction of a
400	400	structure that is included on the National Register of Historic
401	401	Places and requires that a portion of the tax increment of the zone
402	402	be used for the improvement or construction of related facilities
403	403	or for affordable housing;
404	404	(B) generates school district taxes that are paid
405	405	into a tax increment fund created under Chapter 311, Tax Code; and
406	406	(C) is eligible for tax increment financing under
407	407	Chapter 311, Tax Code;
408	408	(6) the total dollar amount of any exemptions granted
409	409	under Section 11.251 or 11.253, Tax Code;
410	410	(7) the difference between the comptroller's estimate
411	411	of the market value and the productivity value of land that
412	412	qualifies for appraisal on the basis of its productive capacity,
413	413	except that the productivity value estimated by the comptroller may
414	414	not exceed the fair market value of the land;
415	415	(8) the portion of the appraised value of residence
416	416	homesteads of individuals who receive a tax limitation under
417	417	Section 11.26 or 11.263, Tax Code, on which school district taxes
418	418	are not imposed in the year that is the subject of the study,
419	419	calculated as if the residence homesteads were appraised at the
420	420	full value required by law;
421	421	(9) a portion of the market value of property not
422	422	otherwise fully taxable by the district at market value because of:
423	423	(A) action required by statute or the
424	424	constitution of this state, other than Section 11.311, Tax Code,
425	425	that, if the tax rate adopted by the district is applied to it,
426	426	produces an amount equal to the difference between the tax that the
427	427	district would have imposed on the property if the property were
428	428	fully taxable at market value and the tax that the district is
429	429	actually authorized to impose on the property, if this subsection
430	430	does not otherwise require that portion to be deducted; or
431	431	(B) action taken by the district under Subchapter
432	432	B or C, Chapter 313, Tax Code, before the expiration of the
433	433	subchapter;
434	434	(10) the market value of all tangible personal
435	435	property, other than manufactured homes, owned by a family or
436	436	individual and not held or used for the production of income;
437	437	(11) the appraised value of property the collection of
438	438	delinquent taxes on which is deferred under Section 33.06, Tax
439	439	Code;
440	440	(12) the portion of the appraised value of property
441	441	the collection of delinquent taxes on which is deferred under
442	442	Section 33.065, Tax Code; and
443	443	(13) the amount by which the market value of a
444	444	residence homestead to which Section 23.23, Tax Code, applies
445	445	exceeds the appraised value of that property as calculated under
446	446	that section.
447	447	SECTION 6. This Act takes effect January 1, 2018, but only
448	448	if the constitutional amendment proposed by the 85th Legislature,
449	449	Regular Session, 2017, authorizing the governing body of a
450	450	political subdivision to limit the total amount of ad valorem taxes
451	451	that may be imposed by the political subdivision on the residence
452	452	homestead of certain lower-income individuals is approved by the
453	453	voters. If that amendment is not approved by the voters, this Act
454	454	has no effect.